The memory shortage has become a political problem in Washington. Now the chip industry has a message for the Trump administration: leave the market alone, or the squeeze gets worse.
The warning came in a letter from SEMI, a semiconductor industry group, to senior US officials. Any attempt to fix the shortage by steering prices or production would deepen it, the group said, as Bloomberg reported.
The crunch traces back to the AI boom, which is swallowing memory chips faster than makers can produce them.
Hands off the market #
SEMI’s argument is blunt. “Interventions that distort pricing or capacity decisions risk prolonging the demand downturn,” the group wrote, in a copy seen by Bloomberg. It wants the opposite approach. Let companies keep signing long-term supply deals with customers, and extend tax breaks that lift US output.
The stakes are high for its members. The three big memory makers all belong to SEMI: Micron in Idaho, plus SK Hynix and Samsung of South Korea. Their shares have soared as AI demand outstrips supply.
A pocketbook problem #
The politics are shifting because the shortage now reaches ordinary shoppers. Memory sits in everything from cars to laptops, and prices are climbing across the board. Even decades-old memory standards have jumped. Apple and Microsoft have both raised prices on popular gadgets, which is exactly what worries politicians eyeing voters’ wallets.
SEMI has a fix for that too. Rather than capping prices, it wants Congress to soften the blow with consumer tax breaks on phones and laptops. The group was careful to thank the administration for its support of the chip sector.
The China question #
The letter lands in the middle of a louder fight. Apple is lobbying the same officials for permission to buy memory from two Chinese firms on a Pentagon blacklist. SEMI’s letter names no Chinese suppliers. But it went to the very people Apple has been pressing: the Treasury, Defence, Commerce and State secretaries.
Not everyone in Washington wants a light touch. One Republican senator, Bernie Moreno of Ohio, has urged the Commerce Secretary to put American buyers first. He warned of a car-industry hit like the one seen during the pandemic.
Years, not months #
The hard truth is time. SEMI says memory capacity should grow about 19 per cent a year, yet AI demand will still eclipse it. New factories take years to build. Until they arrive, the mismatch keeps pushing prices up. For European shoppers, the warning rhymes with one already made in Britain.
Currys expects phones, laptops and TVs to cost more later this year. The industry’s message to politicians is simple. You cannot regulate more chips into existence.
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